CBEC to withdraw 15-yr old cases of Rs 5 lakh central excise evasion

New Delhi: In a bid to cut litigation, the government has decided to withdraw central excise cases older than 15 years involving duty less than Rs 5 lakh.

CBEC Chairman Najib Shah

“It has been decided with the approval of the competent authority to recommend filling of application before the Hon’ble Court to withdraw from prosecution of the cases where evasion of Central Excise duty is less than Rs 5 lakhs and prosecution is pending for more than 15 years,” the CBEC said.

The Central Board of Excise and Customs (CBEC) in an order to all its Principal Chief Commissioners/ Chief Commissioners of Central Excise said the decision was in conformity with the policy of the government to reduce litigation in taxation.

The decision has also been taken after considering the fact that expenditure involved in continuing with such prosecution may not be commensurate with the result likely to be achieved and the human resources saved can be redeployed to garner more revenue for the exchequer.

“Withdrawal of such cases would send a positive message to the manufacturing sector in which policy of ‘Make in India’ is being actively pursued,” it said.

This decision has also been taken in light of fact that the present limit for arrest and prosecution in Central Excise is Rs 1 crore.

This enhanced limit of Rs 1 crore was prescribed on October 23, 2015, prior to which limit was Rs 25 lakh for the past 21 years.

“The present enhanced monetary limit indicates a liberal policy of the government in relation to prosecution. If this limit is interpolated to a value 15 years back, it would be higher than Rs 5 lakh. Therefore, it would be reasonable to conclude that the equivalent cases, of the cases under consideration, would not undergo prosecution today,” the order said.

It asked its officials to file an application requesting courts to allow withdrawal from prosecution in accordance with law.

On filing of such applications, it is for courts to finally decide whether or not to pursue the prosecution.